As an investment banker, your role is to serve as the bridge that links companies needing money to the investors that can provide it. New, growing and even established businesses need money to be able to continue with their operations or expand to a new market. To be able to secure the needed funding, these companies turn to investment banks.
In a nutshell, your primary responsibility as an investment banker can be summed up in one word: Underwriting. You will be advising companies to help them determine the best way to raise the funds they need—whether they need to issue new stocks or sell bonds, for example—and then take care of offering these securities to the investors interested in backing the company. This responsibility entails an in-depth knowledge of corporate banking, finance and the capital markets. This also requires you to work long and grueling hours reviewing a company’s books and evaluating their financial standing to ensure that the funds of the investors will be protected.
One of the major activities of investment bankers includes preparing private companies for their first initial public offering (IPO). This is a very tedious process that requires, among others, conducting an evaluation of the company to determine what its true valuation is and see to it that it that all documents are in place for the offering. Aside from IPOs, you could also be arranging mergers and acquisitions between companies and seeing the entire process through its completion.
To succeed as an investment banker, you will need to have strong mathematical and analytical skills. You will be doing a lot of number crunching and analysis in this profession and these abilities will certainly come in handy. You also need to be able to pay very strong attention to detail since you will be examining a lot of documents and financial data. Having excellent decision-making skills is also going to be necessary in this profession.
Why Become An Investment Banker
A career as an investment banker is very fulfilling for those who love the fast-paced and highly-challenging and fast-paced world of investment and finance. Those who love to crunch numbers and find satisfaction in analyzing data, making negotiations and finally being able to see the contracts signed. On the practical side, a career as an investment banker is also very financially rewarding because of the good pay and excellent compensation package.
Investment Banker Work Environment
Investment bankers work mostly in the securities and commodity contracts intermediation and brokerage as well as depository credit intermediation industries. Many of them work in investment banks, most of the major ones of which are located in New York City. The work is fulltime and done during regular business hours but overtime is common. Investment bankers work long hours under stressful and demanding environments. They may also travel frequently to other countries.
Investment Banker Salary
The Occupational Employment and Wages report of the U.S. Bureau of Labor Statistics revealed that securities, commodities and financial services sales agents, which include investment bankers, have a mean annual wage of $102,510.
Investment Banker Career Outlook
The U.S. Bureau of Labor Statistics revealed good job prospects for securities, commodities and financial services sales agents, the broad occupational category where investment bankers belong to. The agency has projected an 11 percent rise in the employment outlook of these professionals which is about as fast as the national average. Investment bankers will continue to be in demand to facilitate IPOs, mergers and acquisitions as the United States economy experiences continued economic growth.
Investment Banker Degree
The entry point for this profession is a bachelor’s degree in business or similar fields. However, this is only sufficient to gain employment in entry level posts. Students are typically sent on internships in their senior year to gain actual real world experience in the investment banking industry. Interns who perform exceptionally well may receive a job offer from the bank or financial institution they interned at. Many students proceed to obtain their master’s in business administration (MBA) degree because this results to positions of higher responsibility which, in turn, provides lucrative pay and a better compensation package. To practice as an investment banker requires obtaining a license from the Financial Industry Regulatory Authority (FINRA) which necessitates passing a series of tests.